Malaysia’s Oil Palm Growers Should Invest in Africa

Malaysian palm oil producers, which include Sime Darby Bhd. and IOI Corp., should invest in Africa and South America as land for producing the edible oil becomes scarcer at home, a minister said.

Growers in the Southeast Asian nation have used up about 4.4 million hectares (11 million acres) of the 6.6 million available for oil palm, Malaysian Plantation Industries and Commodities Minister Peter Chin Fah Kui said today.
“There’s a need to look beyond Malaysian shores,” Chin told reporters in Kuala Lumpur. “It’s difficult to say how much land Malaysia needs, but we are encouraging our local companies to invest to other countries.”

Malaysia, together with Indonesia, accounts for almost all global output of palm oil. Wilmar International Ltd., the world’s biggest trader of the edible oil, last year targeted Africa for production as increasing demand from China and India stretched the limits of plantations in Southeast Asia.

The land available for planting oil palm in Malaysia can make 25 million tons of the commodity a year at current productivity rates, Chin said. Most of the nation’s unused space is on the island of Borneo in the states of Sarawak and Sabah, he said.

There’s almost no space left for planting on Peninsular Malaysia, home to most of the population and the capital city of Kuala Lumpur, he said.

Bloomberg